Monday, March 20, 2017

World Politics-Economics Right Now

The Cold War ended by an agreement that the USSR leaves Eastern Europe and the USA does not enter the area. What the USA did is treason, like Sykes-Picot. NATO expanded from 16 to 28: Bill Clinton added Poland, Czech Republic and Hungary; George W. Bush the Baltics, Slovakia, Slovenia, Romania and Bulgaria; Obama attached Croatia and Albania. In 1999, 2004 and 2009, respectively. However, did those countries want it? They could have made their own pacts with neither USSR nor USA. The Soviet empire, and the Soviet Union itself, had collapsed.

With NATO at the border, Russia took back its 1954 Crimea gift to Ukraine within the Soviet Union. Kiev with US help fought in Eastern Ukraine to make ethnic Russians escape to Russia. Maybe 60% did.

Enters world history: The Pope and the Patriarch declare their Christianities one and the same (Havana Airport, VIP Lounge, 14 Feb 2016). EU will no longer fight US wars (Bratislava, 6 Nov 2016). Protestant-Evangelical Christianity is marginalized. So is the USA.

Denmark and Norway were with Anglo-America fighting US wars in Libya; and with prime ministers as NATO’s secretary general. “Cold War jitters arise in Norway–arrival of US Marines stoke fears of being in cross hairs of Russia–a more likely bomb target” (NYT 18 Jan 2017). But they are low on the US “Ranking American Allies” (NYT 7 Feb 2017); the top three are Canada, Britain and Australia (top three enemies: North Korea, Iran, Russia). And “US Threatens to Penalize Allies on UN Voting (IPS 7 Feb 2017). Given that and US marginalization, how long will they remain “allies”?

Charles Glass, “How Assad Is Winning” (NYRB 23 Feb 2017): solving national conflict is a sum of local solutions, using local superiority to offer security for local opponents laying down arms; government and opponents both benefiting from fees from road controls. Israel will not get Syria cut into small pieces; USA will not get Sunni rule; Turkey will not control the Kurds; Russia keeps its air-navy base. Colombia, watch out; this may also be your alternative to US bombing. Politically the world is multi-polar, not run by superpowers. The West wants power-over-others and loses power-over-self; others have more Self-control, not Other-control. How does that work economically?

Another key factor is finance economy speculation–as opposed to real economy investment–in derivative chains with super-commissions. If drug chains are illegal and boycotted, why not also derivatives?

China’s 8.2% debt/GDP ratio is the lowest of the 30 states listed. How does Chinese economic policy differ from the West? A first simple formulation: qualitative, focused on “revolutions”, not quantitative focused on “growth”. The Economist Intelligence Unit, The World in 2017 fails to capture new qualities, too obsessed with quantitative growth.

Less simplistic: this difference follows from basics. The West has a creation myth, setting things right, with quantitative change, China has a never ceasing dialectics, new holons, with new realities. The two ways of thinking become self-fulfilling prophecies.

This author had a theory of China changing from distribution to growth and back every nine years from 1949 till 1989; with a 1976-1980 break after Mao’s death and before Deng launched the capitalist revolution.

That theory no longer holds. From 1989 the ethos has been distribution oriented: lifting a sector up–now under Xi Jinping the lagging countryside–or a part, the West; or simply more consumption. 6% growth does not even put China among the ten “Top growers”.

China Daily (27 Feb 2017): President Xi Jinping uses his village level experience for policies lifting them up, “stunned that there was still a place with such poor and difficult conditions after so many years of reform and opening up”. Problems: health, education. The typical reporting on Xi in the West, however, is on power struggle in the Communist Party, failing to catch processes involving millions.

USA: The Economist (p. 99) reports that “Americans–including those at the very bottom–have enjoyed surprisingly robust income gains of late.” Better distribution, great; but “8 richest men match wealth of half the world” (NYT 18 Jan 2017), 6 of them are Americans (one is Spanish, Ortega; one is Mexican, Slim); 3 of the 6 are the founders of Microsoft-Amazon-Facebook, like Internet changing the world we live in.

But USA has economic power-over-others: Lex americana extracted 40 billion dollars from European companies as fines to US authorities (Le Monde Diplomatique Jan 2017). The 1977 US Foreign Corrupt Practices Act was extended to foreign companies in 1998; laws forbidding trade with states under US embargo likewise. US law is extra-territorial, so are US judges-courts, CIA-FBI-NSA at US embassies are the police. States that deviate from US norms when using boycott and trade for foreign policy risk their interests in the USA and prefer not to challenge it.

The net conclusion? The enormous US imbalance: no longer winning wars, less political clout, economically bankrupt but still powerful, shaping the world culturally. Wise US policy would celebrate the last two; unwise policy would Make America Great Again-military-political, as Trump wants. Drop “Again” Mr. Trump, Make America Great! Will do.

And wise world policy? Celebrate the military-political decline of the last superpower, fight lex americana, treat US$ like any other currency–in baskets with others or not–and the US federal reserve bank like other central banks. Normalize the USA from the outside.

And create world, UN, equivalents of Internet etc. as parts of the common human heritage, like oceans and space–beyond state ownership. In deep gratitude to the US–all immigrants–creative, innovative talent.